Tag Archives: rohan grey

So there you have it. As far as I can tell, Murphy effectively conceded that the Austrian School’s economic analysis is inapplicable to contemporary policy discussions that assume as a pre-condition the basic features of our existing monetary and political system.

Instead, the substantive contribution of the Austrian school to contemporary economic debates lies in its normative critique of representative government and public law, and its attempt to provide a practical blueprint for a post-revolutionary economic system based around an absolute respect for private property rights above all other values.

As noted at the end of the previous section, I found the debate engaging but ultimately frustrating, as Murphy’s critique of the coercive nature of our modern monetary system, while morally seductive, begged the question: “Ok, but what is your alternative?”

As mentioned at the end of the preceding section, Murphy’s major outstanding critique of the MMT analysis was that it presumed the existence of a state with a currency monopoly by virtue of its taxation power – or, as Murphy’s described it, MMT was “in favor of robbing liquor stores” in order to ensure a demand for its currency. In my opinion, this critique was underdeveloped, since it did not articulate why the problems identified were worse than the problems of any other feasible system.

As will be clear to anyone who watches the entire thing, there was very little clash by the end of the debate on the operational mechanics of the modern monetary system:

Murphy: In particular, what makes the Austrians different from other schools of thought, even other nominally free market schools like the Chicago economists – Milton Friedman, guys like that – the Austrians have a very particular view of what interest rates do.

So the Austrians say “look, the interest rate is a price, and in that respect it is like any other price – it communicates information about the real world. It’s not an arbitrary number – it really means something – and if the market interest rate is supposed to be 7 percent and the Federal Reserve makes it 0.25 percent, that’s going to screw things up.